(CNSNews.com) - New York Democratic Congressman Charles Rangel Friday responded to suggestions that the federal income tax be gradually replaced with some form of consumption tax, saying that equal taxation is unfair.
Federal Reserve Chairman Alan Greenspan told the President's Advisory Panel on Tax Reform Thursday that the current U.S. tax code is so complicated as to be a drain on the economy.
"A simpler tax code would reduce the considerable resources devoted to complying with current tax laws," Greenspan said, "and the freed-up resources could be used for more productive purposes."
Rangel responded that any tax of that nature, such as a national sales tax, would be an injustice.
"When you have a tax, where you pay the same tax whether you're wealthy or you're poor," Rangel said, "that's not fair."
Rangel's response to the idea that all Americans would pay the same percentage of their income in taxes, commonly referred to as a flat tax, or that Americans would be taxed based on an equal percentage of what they spend, rather than what they earn, a consumption tax, was broadcast on CBS Radio news Friday morning.
Grover Norquist, president of the conservative group Americans for Tax Reform, told the Cybercast News Service that, "Rangel is wrong. The only fair taxation is to treat all people equally.
"We do not have two prices of bread - one for the poor and one for those who earn more. All goods and services have one price for all Americans," Norquist said. "Government should be the same. We should all pay the same price (tax) for government."
Norquist said those who benefit from the redistribution of income through the current progressive income tax system are unlikely to want to see it end.
"Some politicians are elected by voters that do not pay the true cost of government," Norquist said. "We should not be surprised that voters who get subsidized government want more of it."
Former U.S. Treasury secretary James Baker also contradicted Rangel's assertion that equal taxation would be unfair.
"While I am no expert on the subject, I believe that consumption-based taxation has much to commend it," Baker told Associated Press Tax Writer Mary Dalrymple. "If properly crafted, a consumption tax could certainly meet the fundamental criteria of being simple, fair and pro-growth."
Rangel's unfair taxation comment came just two days after he accused President Bush of committing fraud in the war on terror. He appeared on CNN's Crossfire program March 1, and was asked about a CNN/USA Today/Gallup Poll taken February 25 through 27 that showed high public approval - 60 percent -- for President Bush's current handling of terrorist threats. Rangel was asked if those polling results were because of public stupidity.
"No," Rangel said. "I think that Bush has done a fantastic con job on the American people."
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